In today’s workplace it is tricky business striking the balance between a fun-loving, loose and creative atmosphere and one that also respects the needs and viewpoints of everyone employed. Leaders often lose their bearings and become unaware of harmful behavior and an unproductive environment. By either going along or looking the other way, they are contributing to a boiling, if not explosive, set of problems that they will be held responsible for in the end.

What can leaders and business owners do to build a respectful and trusting workplace? One that fosters creative and collaborative thinking for the long haul – not just fun in the moment? For sure they must establish the policies of behavior that all employees must abide by – that pay attention to both the legal and motivational aspects of employee needs. But equally important, they must be a model of respectful behavior. Here are a few key components:

Make sure you are constantly encouraging open communication. Listen to employees and other leaders, address issues head-on that might be hard to confront, question assumptions that your team makes — all this ensures that you hear the true concerns of people and focus on solving them proactively.

Be sure your words and your actions are in sync – that you are consistent. Be the model of your stated organizational values –even if that means stepping away from “the fun” at times. Be honest and follow through on commitments, both your own and the ones stated in the policy manual.

Outwardly show that you value the contributions and opinions of everyone – demonstrate, don’t just say that diversity is an advantage. Give due credit without bias. And don’t expect favors in return. Show confidence in others by advocating for everyone. If you do these things, you earn a lot of credit when the occasional bump occurs.

Harassment and other poor behavior are cues that the work environment has been ignored and left to the discontent to define. Creating and leading the culture of your organization is as important as any other business factor in running a successful enterprise. As the saying goes, “a little respect goes a long way.”

“Human resources” is really your people strategy for the new economy.   As Lee Iacocca once said: “Business, after all, is nothing more than a bunch of human relationships.”   No doubt you are paying close attention to your customer relationships, but equally important are your employee relationships.  Making sure the right people are in the right jobs doing the right things at the right times – and feeling good about it – will be the key to success now more than ever.

So there is no better time than now for an “HR audit.”  This is more than an appointed HR person or an outside consultant giving your handbook the “once over.”  Senior leaders and owners should take stock of the big picture and make sure people practices are aligned with the direction of the company.  Your new business plans and strategies for the new world order must both guide, and be supported by, how you hire, retain and motivate your people.

Effective HR practices have at least 3 major outcomes.  First, they help manage your business efficiently.  Efficiency means aligning work and behavior with the direction of the company.  It means hiring, reassigning or rearranging people into the right roles.  And it means managing records, hours, wages and benefits quickly and accurately. 

Second, strong HR practices protect you from legal problems and costly disputes.  Employment related lawsuits have risen dramatically.  Discrimination. Harassment. Wrongful discharge. Safety violations.  These are the consequences of a stressed workforce. 

Third, excellent HR practices build loyalty and motivation for your best performers.  You need to hold onto your most promising and productive workers.  They are the key both to surviving the tough times and thriving when things get better.  Fair and consistent practices build trust.  Recognizing strong performance builds motivation.  And continually seeking opportunities for the growth and development of your A-team builds long-term loyalty.

Now is the time for a systematic review of your human resource functions.  Ask these 10 questions:

1. Have you articulated and communicated the new direction or vision for the company?
2. Do job descriptions and performance evaluations reflect this new direction?
3. Do you understand the core competencies necessary for all employees to reach your new objectives?
4. Are you hiring or placing people in roles based on these competencies?
5. Are your policies and procedures up-to-date and legal given changes in the law and your workplace?
6. Are your personnel information and documentation systems efficient and effective?
7. Have you let safety practices slide during the tough economy?
8. Is your compensation plan competitive? 
9. Are you reviewing the impact of sweeping health care reform on your benefits?
10. Are you building strong teams and a trusting environment so your people make sure “their” business succeeds?

Involve your leaders and people in this process.  It is a strategic imperative.  And know that help is just a phone call away.

Managers take comfort!  Your employees dread this process as much as you do!  What could be more de-motivating than an unprepared,  incomplete, irrelevant and/or dismissive process by which you are “graded” looking back on things you did not know were important , or worse, really aren’t important!

Okay, maybe that’s too harsh.  But the reality is performance reviews are generally looked on as a once a year administrative task, wasting time and money, that HR people force on you.  Yeah, sort of like taxes.  What you might not know is that the best run companies, big and small, take this process seriously and reap the benefits – perhaps at your expense.

You’ve heard it before.  “Good performance appraisal is not an event, it’s a process.”   But what does that really mean?  It means the year-end review and the forms are mere milestones in a much larger, more relevant approach to managing your business.  The best run companies see performance management as a method to “operationalize” their business or strategic plan.  It is THE plan for each individual to insure your company achieves its goals.

I generally avoid sports analogies, but it is useful here.  Imagine a highly successful pro football team where the coach sits with each player at the end of the season to tell them what they did well and where they should develop and improve.  Checking boxes on a form and writing a summary such as: “Peyton is a real team player and contributes to our success.  Next year I hope to see him throw for even more yards.  Thanks for your hard work.”

Not real useful or specific and certainly not timely.  Real teams have specific plans for each player, prepare those players for their role, coach them week to week with specific feedback– both positive and for improvement, and discuss future development.  Year-end “reviews” are a mere summary of the coaching and planning that has taken place all year long and a time to reflect and gain input on the year ahead.

Performance management, and the reviews in particular, are a headache because as leaders we make them irrelevant.  Creating a few focused objectives for each employee — the specific “whats” and “hows” for executing your business plan — should be the aim.  Managers should be using this all year long to check, coach and refine the performance of their employees.  It is a win-win.   Managers are less likely to avoid discussions with employees because they can focus on objective performance issues and give ongoing coaching instead of vague, uncomfortable  feedback that strays into personalities or subjective perceptions.   And employees win by seeing  the relevance of their work.  By the way, meaningful work, feedback, and growth opportunity all rank higher than pay when it comes to motivating employees.

As I have told clients, I would rather you use a blank sheet of paper and crayons to capture a few clear, specific objectives that are tied directly to the business plan than a fancy form with lots of check boxes and generic language and behaviors.

So what about those best run companies?  In an in-depth study (Bernthal, Rogers & Smith, 2003) their improvements after implementing an effective performance management process were astounding.  Managers found:

39% improvement in innovation
30% improvement in employee grievances and complaints
54% improvement in job satisfaction
62% improvement in customer satisfaction
44% improvement in quality
69% improvement in employee productivity
50% improvement in financial performance

In a new era of competition and strain on business success, who wouldn’t like to see this type of impact?  When you set up performance objectives as an extension of your strategic plan for success, and not another “tax” on managers and employees, coaching and reviews will bring employee motivation to life, not death.

In a struggling economy, and especially for smaller companies fighting to stay above water, it is tempting to suggest that the human resource function is a “cost” and that either cutting away HR activities and outside help or trying to redistribute HR responsibilities across several managers or employees makes good business sense.  For example, whoever handles payroll “gets stuck” with other HR responsibilities.  This is a dangerous practice.

Why?  In turbulent times, how we handle the people-side of our business gets more, not less, complex.  Employment related laws and legislation are changing and expanding at a rapid pace.  Lay-offs and re-hires due to a downturn raise important considerations.  Missteps can be costly.  And when you do hire people you now face a vastly expanded pool of applicants.  Who is the right fit and how do we know?  Also many leaders are re-inventing company culture to reflect the new world order.  These are just a few reasons business leaders are hunting for HR advice.   And in fact, HR outsourcing at Red and Associates is growing like never before.

Rapid growth in a booming economy better shields loose HR systems and people problems.  As we look ahead to a more competitive market, as well as a climate of increasing oversight, businesses will require a strong combination of innovation, quality, service, and trust to succeed.  The new frontier for break-through ideas, for zero-defects, for reduced cycle-times, for consistent customer satisfaction, and for a high- integrity workforce will be engaging your people, not just harnessing technology.  Paying attention to who you hire, effectively coaching their performance, leading them through constant change, and motivating a diverse group of people will be the defining factors in the years to come.  Traditional HR administration needs to support a people strategy directly tied to business strategy.

HR is indeed relevant – now more than ever.  So ask yourself:

•    Do we have the best people in place for the future of our business?
•    Are employees being coached and developed for the challenges of the new economy?
•    Do our HR systems reflect the values and the strategic direction of the organization?
•    Are the people guarding our compliance with an array of new employment laws truly knowledgeable?
•    Are owners and leaders spending too much time handling HR issues and desperately seeking more time to do what they were trained and desire to do?

Your answers may convince you that HR really is about your business, and you need it.